Analysis of Corporate and Business Strategies
The following report will describe an overview of the current environment and how it is affecting the hotel industry, and then will be preceded by a corporate level and business level strategy analysis. The company that will be the subject of the paper will be Hyatt Global Corporation, and its brand, Hyatt Regency.
In the PESTE (Political, Economic, Socio-Cultural, Technological, Ecological) analysis the group discovered many circumstances that are currently affecting the hotel industry. The threat of terrorism, the financial crisis, the evolution of travelers, the development of technological advances, and the effects of global warming and natural disasters are all issues that have been on the rise in the past and current global economy.
Hyatt Global Corporations main mission “is to provide authentic hospitality by making a difference in the lives of people we touch everyday including our associates, guests and owners.” (Reference 15). Along with their mission, Hyatt’s objectives are to improve their existing hotels, and to expand their presence in attractive markets. They rely heavily on their associates’ capabilities to provide service, brand portfolio, and innovation capabilities. Hyatt, while improving on their brands, also looks to diversify their activities, e.g. their development of senior care centers.
Hyatt Regencys’ are located all around the globe, and compete directly with brands including Marriott, Sheraton, etc. Their value chain includes asset management and human resources (at corporate level), marketing services, a central reservation system, operations, and their Gold Passport loyalty program. All are part of the direct production of the service they provide. Hyatt Regencys’ have a high bargaining power over their suppliers and buyers, and have managed, thanks to their critical success factors, to create large entry/mobility barriers, to overcome the threats of potential competitors and entrants. The brand’s most important strength is their world brand recognition, which is limited because of their weakness in size. One of their greatest opportunities is the potential for growth, which is diminished by the high competition in the market. In order to improve its financial performance and to adapt to the evolving environment, the firm has managed to employ all of its valuable resources successfully, including human resources, assets, brand portfolio, and innovations.
In conclusion, Hyatt Global Corporation has become a successful firm throughout the world, because of its well-thought out decisions, and adaptation to global changes in the hotel industry. As Hyatt Regency continues to competitively expand and provide guest satisfaction, its name becomes more popular with travelers and loyal customers.
I. Environmental Analysis
Uncertainty is common in the world today, which gives the political variable a major importance in terms of environment. Indeed, the omnipresent risks’ encourage increased political power, as people expect more from their governments.
Most importantly, people expect it to be protected from the threat of terrorism, which has become a major obstacle over the past decade, notably with the rise of anti-western attitude. An average of 12 terrorist attacks occurs every month (Reference 1). Safety and security are therefore major concerns nowadays in the hospitality industry. It is important that governments manage to maintain acceptable levels for both of these elements, as the potential consequences can be catastrophic. After 9/11 for example, the World Travel and Tourism Council has estimated a 10% decrease of the travel and tourism demand worldwide (Reference 2). However, it is hard to measure as many different factors influence demand, and therefore it is only an estimation.
Another reason why uncertainty reigns is because of the huge deficits...
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